What is a healthy first-pass resolution rate?
A healthy first-pass resolution rate (FPRR) is 90 percent or higher, meaning at least 90 percent of claims are paid in full on first submission without rework or appeal. That 90 percent is the target RCM vendors such as MD Clarity quote; HFMA's 29 MAP Keys do not include FPRR, so there is no standards-body threshold or published national median.
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Definition
First-pass resolution rate is the percentage of claims paid in full on first submission without requiring any additional action from the practice.
The detail
FPRR is a stricter metric than clean claim rate. Clean claim rate measures whether the claim was accepted by the clearinghouse and payer for processing. FPRR measures whether the claim was actually paid in full on first adjudication. The gap between the two is the work your billing team has to do on accepted-but-underpaid claims. HFMA's MAP Keys, the industry's standard set of 29 revenue cycle KPIs, include clean claim rate (CL-1) but not first-pass resolution, so treat the 90 percent figure commonly quoted as a working target rather than a standard. The biggest drivers of FPRR drag are bundling and unbundling errors, modifier issues, medical necessity documentation gaps, prior authorization mismatches, and contractual underpayments where the payer pays less than the contracted rate. The last category is often invisible because the claim shows as paid; only systematic contract reconciliation surfaces underpayments.
HFMA's 29 MAP Keys include clean claim rate (CL-1) and remittance denial rate (AR-5) but not first-pass resolution rate, so the 90 percent FPRR figure is a working target, not a published standard.
Source: HFMA MAP Keys
RCM software vendor MD Clarity: “The industry standard benchmark for FPRR is typically set at 90%.”
Getting claims right the first time matters because many denials cannot be won back: of the almost 32 percent of denials Optum classes as unequivocally avoidable, 40 percent cannot be recovered.
What this means for clinic owners
From Sorso
FPRR is the metric that catches contractual underpayments. If you only track clean claim rate and net collection rate, your FPRR can be poor without you ever seeing it. Add it to your monthly KPI report and review it by payer.
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What is a good clean claim rate?
The widely cited target is a 98 percent clean claim rate on first submission. HFMA repeats it in its 7 KPIs guidance, attributing the figure to Becker's ASC Review; it is a target, not a measured average, and every point below it is revenue sitting in rework rather than in the bank.
What is a healthy denial rate?
A healthy initial denial rate is under 5 percent of submitted claims: HFMA calls that optimal, AAFP calls it more desirable, and both put the industry average at 5 to 10 percent. Optum's 2024 Denials Index, based on hospital claims, found an average denial rate of 12 percent in 2023. Track denial write-offs as a share of net patient revenue too, the metric HFMA lists as AR-6.
What is modifier 25 used for?
Modifier 25 indicates that a significant, separately identifiable Evaluation and Management (E/M) service was performed by the same physician on the same day as a procedure, allowing both to be billed when properly documented.
What are the most common billing errors in healthcare?
The most common healthcare billing errors are eligibility verification failures, missing prior authorization, incorrect or missing modifiers (especially modifier 25 and 59), upcoding/downcoding, missing documentation for medical necessity, and timely filing failures.
How do I build a 13-week cash flow forecast for my medical practice?
A 13-week cash flow forecast is a weekly rolling projection of expected cash receipts and cash disbursements over the next 13 weeks (one quarter), updated weekly with actuals. For medical practices, it is the most practical tool for managing the gap between the date of service and the date payers pay. Build it from your billing system's expected reimbursement schedule and your fixed disbursement calendar (payroll, rent, taxes, debt service).
Founder of Sorso and a CFA charterholder. Before Sorso, Stan spent 19 years in corporate finance at institutions including UniCredit and Société Générale — managing a $450M loan portfolio and making senior partner at a major mezzanine lender by 29 — then built a fractional CFO firm exclusively for outpatient healthcare clinics.
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